THE IMPACT OF AUDIT COMMITTEE FINANCIAL EXPERTISE ON CORPORATE FINANCIAL DECISIONS: THE IMPACT OF AUDIT COMMITTEE FINANCIAL EXPERTISE ON CORPORATE FINANCIAL DECISIONS

نتاج البحث: المساهمة في مجلةArticleمراجعة النظراء

ملخص

Audit committee (AC) financial experts is considered one of
the important corporate governance mechanisms due to their
vital role in overseeing companies’ financial reporting procedures
and enhancing corporate financial decisions. Regulators and
policymakers require Omani firms to have at least one director
with financial expertise sitting on ACs. Therefore, we aim to
investigate the effect of AC financial expertise on corporate
financial decisions (capital structure, dividend payment and cash
holdings). We use a data set of all Omani financial institutions
(36 firms) listed on the Muscat Stock Exchange (MSX) over
the period from 2014 to 2019, consisting of 216 firm-year
observations. The paper contributes to the growing body of
the literature by being the first study to examine the impact of
AC financial expertise on financial decisions. The study also
contributes to the literature by integrating multiple theories:
agency, resource dependence and signalling, to enlighten
the effect of the unique power of financial expertise on making
financial decisions. We find that AC members with financial
expertise are positively related to the level of cash holdings,
leverage and dividend payment in financial companies.
The findings provide empirical evidence to regulators to
encourage companies to exceedingly appoint financial experts as
AC members due to their unique resources, which improve their
monitoring role and constraining management opportunistic
behaviour.
اللغة الأصليةEnglish
الصفحات (من إلى)348-359
عدد الصفحات12
دوريةCorporate Ownership and Control
مستوى الصوت18
رقم الإصدار3
المعرِّفات الرقمية للأشياء
حالة النشرPublished - مايو 26 2021

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